Company

Corporate tax planning is often time-consuming and complex. Business people often lack the time to keep up with changes to tax and estate legislation which may affect their business.

Company Taxes

Corporate tax planning is often time-consuming and complex.

Business people often lack the time to keep up with changes to tax and estate legislation which may affect their business. This is why professional advice...

Corporate tax planning is often time-consuming and complex.

Business people often lack the time to keep up with changes to tax and estate legislation which may affect their business. This is why professional advice and assistance is invaluable.

Spanish companies are taxed on their worldwide income. Non-resident companies in Spain, however, are only taxed on their Spanish income. In Spain business income for tax purposes is defined as all business revenue and includes all capital gains (though a capital gains tax credit may be available), less expenses and VAT payments.

All companies must submit annual accounts to its shareholders for approval. These must be approved within six months from the end of accounting period.

All companies need to submit annual accounts to the Registro Mercantil.

Formation of Companies

This service is intended for those who want to:

Start a Company in Spain.
Want to purchase an expensive property (or group of properties) in Spain, and wish to reduce the tax burdens...

This service is intended for those who want to:

Start a Company in Spain.
Want to purchase an expensive property (or group of properties) in Spain, and wish to reduce the tax burdens associated with such a purchase. Although not anymore suitable for savings in Capital Gains Tax, Spanish Companies are still excellent to reduce Wealth and Income Tax and Inheritance Tax.

The Company Incorporation service includes

Advice about the most suitable legal structure for your business, taking into account details such as the size of the company, the number of shareholders, the purpose of the business, and other issues that will have an impact on the associated taxes. The steps for the company formation in Spain are as follows:

Request of the "Certificación Negativa del Nombre" - a certificate stating that the company name you intend to use is not already taken
Application for the CIF number, or company tax identification number
Writing of the official statutes for the company
Assistance at the Notary Public when signing the "Deeds of Incorporation" or signing on the client's behalf via power of attorney
Filling in of forms for the payment of the company taxes (Impuesto sobre Operaciones Societarias), an amount of 1% of the initial company capital (included in initial fee)
Registration of the company at the local Mercantile Register

Costs

In addition to our fees, you will be required to pay notary and land registry fees, plus taxes.

Before you Start

You should provide us with the following:

Personal details of shareholders
Passport copies
Company objectives
You need to have a valid NIE number

If you are not in Spain, company formation can be still arranged on your behalf with a valid power of attorney (we will provide you with a draft).

Setting up a business

When deciding on your business structure, you can choose from setting up as a sole trader (empresa individual) with the business registered in one person’s name; a partnership of two or more individuals (sociedad civil); a limited company...

You will need to pay social security for yourself and for any employees. These payments will entitle you to the use of the local health service and can contribute to a state pension.

Loans (Préstamos)

Available for residents and non-residents alike, loan conditions vary according to the size of the loan needed (or if it’s considered a microloan), the amount of collateral, the financial institution and other factors. You may be required to pay the loan back in as little as three years or in some cases as many as fifteen. Payments could be required monthly, quarterly or semestrally. Check with Spain’s ICO (Instituto de Crédito Oficial, in English and Spanish) or any major bank (banco) or savings bank (caja de ahorros). Just be sure to shop around.

Grants (Subvenciones or Ayudas)

Grants are available to new and existing businesses on the municipal, provincial, regional, national and European Union level. Grant conditions vary widely, but grants are commonly available for businesses in certain industries or sectors, creating employment in particular areas or employing certain disadvantaged populations.

Check with your municipal, provincial and regional government, or your local Chamber of Commerce, for available grants. Check DGPYME (Dirección General de Política de la Pequeña y Mediana Empresa) for Spanish grants and Guide for European Union grants.

POA

A Power of Attorney is a document that is legally binding and grants an individual (or group of individuals) the right to act on behalf of a person for the stipulated tasks or responsibilities that are outlined within the Power of Attorney...

A Power of Attorney can be signed in Spain but also at a Notary’s office near your home. The "Apostille" is needed whenever you intend to use documents from any country outside of Spain within Spain. This is because Spain is a member of the Hague Convention, which establishes a new, standardised form of Legalisation.

On October 5, 1961 several nations joined to create this simplified method of legalising documents through the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.

If you live in the UK:

Ask your Notary if they can provide this as an additional service to you.

Send the documents to the FCO in London with a stamped addressed envelope – this process takes about a month. For detailed information about how to do this, please follow this link: FCO Applications by Post Page
Go in personally to the FCO where they offer a same-day service. Note the FCO is located at:

The Legalisation Office
Norfolk House (West)
437 Silbury Boulevard
Milton Keynes
MK9 2AH
The Public Counter

If you live in Ireland:

Send the documents to the Department of Foreign Affairs (DFA) in Dublin with a stamped addressed envelope – this process takes about a month. For detailed information about how to do this, please follow this link: How-To
Go in personally to the DFA where they offer a same-day service. Note that there are now two locations in Ireland where you can do this:

- Passport Office Cork - Consular Services - 1A Southmall Cork - 021 4944 765
- Consular Section - Department of Foreign Affairs - Hainault House - 69 - 71 St. Stephen's Green - (01) 408 2174
Ask your notary if they can provide this as an additional service to you.

If you are living in another country:

NIE

In Spain you cannot legally buy property, a house, car, boat etc without having applied to the police for your NIE number and had your NIE documentation returned. Likewise, you cannot enter into a contract for the supply of electricity, water or a telephone line etc without giving your NIE/NIF number together with your bank details because these services will only accept clients whose bills are paid automatically from a bank. Neither can you arrange an insurance policy or order goods or services, sign on for the National Social Security, Health Service or commence a job without showing your NIE number.

The Decree (Real Decreto 338-1990) of 9th March establishes that everyone, of whatever nationality, resident or not, who has any "official business" in Spain, must have a fiscal number (NIF/NIE) which is used to identify them on all official documents.

NIE (Número de Identificación de Extranjero): This is every foreigner’s identification number in Spain and it is required in order to file taxes, establish a business, open a bank account (not necessary for foreign accounts), and for almost any other form you will have to fill out. Both EU citizens and non-EU citizens get issued an NIE.

DNI (Documento Nacional de Identidad): This is the ID number for Spanish citizens. The same number is used for the Spanish driver’s license.

NIF (Número de Identificación Fiscal): This is the tax ID number for all individuals. For Spaniards, it’s the DNI plus one letter; for foreigners, it’s the same number as your NIE. Once you have an NIE, you do not need to re-apply for an NIF; if and when you have to pay taxes, use your NIE number. If you’re a nonresident who has to pay taxes in Spain, you may get an NIF issued to you without having an NIE. This, of course, does not mean you get automatic residency in Spain, nor will it make it any easier to get residency.

CIF (Certificado de Identificación Fiscal): This is the same as the NIF, but for companies.

Social Security Number: If you intend to work in Spain, your employer will apply for your social security number when you start your first job. This number will stay with you for all subsequent jobs. If you are intending to be self-employed, you apply for this number yourself.

Once you know what the procedure is obtaining your NIF number is little more than queuing.